1000 t 800 700 600 500 400 300 200 100 5 10 15 20 25 30 35 40 Quantity 34 Refer
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1000 t 800 700 600 500 400 300 200 100 5 10 15 20 25 30 35 40 Quantity 34 Refer to Figure#4. This figure depicts a situation in a monopolistically competitive market. In short-run, what price will the monopolistically competitive firm charge in this market? a. $300. b. $400. c. $500. d. $600. 35 Refer to Figure#4. At the profit-maximizing or loss minimizing output level the firm in this figure has total costs of approximately a. $2,000 b. $3,000 c. $4,000 d. $5,000 The firm 36 Refer to Figure #4. Assume the firm in the figure is currently producing 8 units of output and charging Sao. a. will increase its profits if it raises its price and reduces its production level. b. will increase its profits if it lowers its price and expands its production level. is maximizing profits. d. will increase its profits if'it raises its prices and expands its production levl. 37. Which of the following best describes the idea of excess capacity in monopolistic competition? a. Firms produce more output than is socially desirable. b. Due to product differentiation, firms choose output levels where P> ATC. c. Firms keep some surplus outpu d. The output produced by a typical than what would t on hand in case there is a shift in the demand for their product. I firm is less than what would occur at the minimum point on its ATC curveExplanation / Answer
34)a)In the short run, a monopolistically competitive firm maximizes profit or minimizes losses by producing that quantity that corresponds to when marginal revenue = marginal cost.In the short run, a monopolistically competitive firm maximizes profit or minimizes losses by producing that quantity that corresponds to when marginal revenue = marginal cost.
$300
35) $ 500 (ATCat Q=10)
36)b) increase profits if the firm expands production and lowers price levels.
37) b) product differentiation is characteristic of monopolistic competition.
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